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Business, 15.05.2021 04:10 dakshshberry

Wilson Corporation sells an industrial solvent at a normal selling price of $100 per barrel. The variable cost per barrel is $40, and the company's total fixed cost is $900,000 per month. The company has excess capacity of 30,000 barrels per month. Management was recently contacted by a potential buyer with whom they had no prior experience. The buyer offered to buy a special order of 5,000 barrels at a discount price of $80 per barrel. The special nature of the order would increase variable costs associated with it by $10 per barrel over the normal variable cost. The special order would also increase fixed costs by $60,000. If the special order is accepted, operating income will increase by $ .

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